EoW records Jignesh Shah's statement, to summon brokers

Recording of Shah's statements lasted 3-4 hours

The Economic Offences Wing (EOW) of the Mumbai Police today summoned Jignesh Shah, Chairman and Group CEO of Financial Technologies (FTIL), for further interrogation in the Rs 5,600 crore scam at FTIL subsidiary National Spot Exchange Ltd (NSEL).

The investigation wing of the Mumbai Police had earlier called him few weeks ago. But, according to an EOW official, some more facts came to light after interrogating Shah. The recording of the statements of Jignesh Shah lasted for 3-4 hours till late evening.

Further, the EOW is looking to summon brokers to investigate their role of trading in paired contracts. The official said that brokers used to corner a commodity after booking it in bulk in the morning and would then allocate it in small quantity to their interested members. According to their modus operandi, members of brokers were not necessarily members of exchanges too.

A large number of big brokers and their directors also traded huge quantities of commodities on their proprietary account which they told EOW, were not on their own record. But, EOW discovered brokers’ trading records in the software and hard disk seized by them from NSEL offices.

Brokers were charging different rate of interest for availing funds to their own private members which was obviously higher than the rate of interest assured by NSEL to brokers.

“Even directors of broking firm, entered trades on NSEL in their personal account and did trade modifications upto 95 per cent. The modus operandi of NSEL brokers was not the normal market practice,” said the official.

Meanwhile, the MPID court on Wednesday ordered Income Tax Department to defreeze Rs 59.5 crore cash lying in the account of Mohan India, one of the largest defaulters and deposit this amount in NSEL’s escrow account for distribution among investors.

The court also ordered the Enforcement Directorate to defreeze Mohan India’s assets so that they can monetize and repay their dues to NSEL as committed in the settlement agreement.